Fixed Mortgage Rates are even with yesterday.
Mortgage Backed Bonds are now trading below the 25 day moving average. Unless bonds can break back through this threshold it is likely that bonds will continue to slip a bit, causing mortgage rates to increase. For shorter term transactions I am going to shift my outlook to a locking stance.
Also, the New York Federal reserve announced today that last week, it had purchased $21.7 Billion in Mortgage Backed Securities. Although this is still good news for the overall mortgage rate environment, the bonds that were purchased carried higher rates of between 4%-6%. It is believed that unless they start buying bonds with lower coupons, such as the 3% range that the purchase program won’t help get mortgage rates get much lower than they are now. Again, this is an open market so rates can still move lower on other factors, but the Fed purchasing Mortgage Backed Securities alone, won’t be able to move rates to levels of 4%, especially when they are concentrating on purchasing higher coupon bonds.
Current Outlook: Locking